German court throws out 2 market manipulation suits vs Porsche SE

Article by Anita Panait, on September 20, 2012

A German regional court Braunschweig, northern Germany has dismissed two investor lawsuits against the Porsche SE, accusing it of market manipulation involving Volkswagen shares. Porsche SE welcomed the ruling as a “positive signal” and vowed to oppose the remaining lawsuits “with all rigor,” according to company spokesman Albrecht Bamler.

The investor suit is claiming EUR4.7 million ($6.14 million) of damages from Porsche SE for alleged market manipulation. Porsche SE is currently facing a number of suits in Germany and in the United States by hedge funds. German and US investors allege that Porsche SE concealed a move in 2008 to purchase Volkswagen and of secretly accumulating a majority stake in VW.

Porsche SE disclosed on Oct. 26, 2008, that it controlled 74.1 percent of VW, partly via options, and was looking forward to acquire 75 percent and then a takeover. Porsche’s announcement caused VW's stock to soar as short sellers raced to acquire shares, betting that VW would fall. Three remaining lawsuits, which are seeking EUR4.1 billion combined, are still pending at the German court.

Porsche SE incurred over EUR10 billion in debts in its botched attempt to take over VW, forcing it to dump its attempts and instead divest a 49.9 percent stake in Porsche AG to VW for EUR3.9 billion in December 2009. VW acquired the remaining 50.1 percent stake in Porsche AG, which it did not already possess, for nearly EUR4.5 billion ($5.8 billion).

Topics: germany, porsche

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